UNITED
      STATES


SECURITIES
      AND EXCHANGE COMMISSION


Washington,
      D.C. 20549










FORM
      10-KSB









x
            **ANNUAL REPORT UNDER SECTION 13 OR 15(d)
                OF THE
                SECURITIES EXCHANGE ACT OF 1934**




**For
      the fiscal year ended June 30, 2005**





x
            TRANSITION
                REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
                1934





**For
      the transition period from________to________**


**Commission
            file number 000-05391**
  
  METWOOD,
          INC.
 **(Name
          of small business issuer in its charter)**
 
 **NEVADA**
                **83-0210365****(State
                    or other jurisdiction**
                **(IRS
                    Employer****of
                    incorporation or organization)**
                **Identification
                    No.)**
  **819
          Naff Road, Boones Mill, VA 24065**
 **(Address
          of principal executive offices)**
 
 **(540)
          334-4294**
 **(Issuer’s
          telephone number)**
 
 **Securities
          registered under Section 12(b) of the Exchange Act:**
 **None**
 
 **Securities
          registered under Section 12(g) of the Exchange Act:**
 **$0.001
          Par Value Common Voting Stock**
 **(Title
          of Class)**
    
 
  Check
            whether the issuer (1) filed all reports required to be filed by Section
            13 or
            15 (d) of the Exchange Act during the past 12 months (or for such shorter
            period
            that the registrant was required to file such reports), and (2) has been
            subject
            to such filing requirements for the past 90 days. Yes x Noo
 
 Check
            if
            there is no disclosure of delinquent filers in response to Item 405 of
            Regulation S-B contained in this form, and no disclosure will be contained,
            to
            the best of registrant’s knowledge, in definitive proxy or information
            statements incorporated by reference in Part III of this Form 10-KSB
            or an
            amendment to this Form 10-KSB. o
 
 State
            issuer’s revenues for its most recent fiscal year: $4,181,280
 
 As
            of
            September 28, 2005 there were 11,877,499 common shares outstanding, and
            the
            aggregate market value of the common shares (based upon the average of
            the bid
            price ($1.10) reported by brokers) held by non-affiliates was approximately
            $13,065,249.
 
 Transitional
            Small Business Disclosure Format (check one): Yes o No x
  2
  SIDIARY


PagePART
                    IItem
                    1  Description
                    of Business
                1Item
                    2  Description
                    of Property
                5Item
                    3  Legal
                    Proceedings
                5Item
                    4  Submission
                    of Matters to a Vote of Security
                    Holders
                5PART
                    IIItem
                    5  Market
                    for Common Equity and Related Stockholder
                    Matters
                6Item
                    6  Management’s
                    Discussion and Analysis or Plan of
                    Operation
                6Item
                    7  Financial
                    Statements
                10Item
                    8A        Controls
                    and Procedures
                23PART
                    IIIItem
                    9  Directors
                    and Executive Officers of the
                    Registrant
                24Item
                    10        
Executive
                    Compensation
                26Item
                    11        
Security
                    Ownership of Certain Beneficial Owners and Management
                27Item
                    12        
Certain
                    Relationships and Related Transactions
                28Item
                    13        
Exhibits
                    and Reports on Form 8-K
                29Item
                    14        
Principal
                    Accountant Fees and Services
                29Signatures
                30Index to Exhibits
                31





3




*SPECIAL
        NOTE REGARDING FORWARD-LOOKING STATEMENTS*
 
 *This
        Annual Report on Form 10-KSB contains certain forward-looking statements
        within
        the meaning of the Private Securities Litigation Reform Act of 1995 with
        respect
        to the financial condition, results of operations, business strategies,
        operating efficiencies or synergies, competitive positions, growth opportunities
        for existing products, and plans and objectives of management. Statements
        that
        are not historical in nature and which include such words as
“anticipate,”“estimate,”“should,”“expect,” believe,”“intend,” and similar
        expressions are intended to identify forward-looking statements for the purpose
        of the safe harbor provided by Section 21E of the Exchange Act and Section
        27A
        of the Securities Act.*






**PART
      I**





**Item
      1.** **Description
      of Business**





Business
      Development





We
      were
      incorporated under the laws of the State of Wyoming on June 19, 1969. Following
      an involuntary dissolution for failure to file an annual report, we were
      reinstated as a Wyoming corporation on October 14, 1999. On January 28, 2000,
      we, through a majority shareholder vote, changed its domicile to Nevada through
      a merger with EMC Energies, Inc., a Nevada corporation. The Plan of Merger
      provided for the dissenting shareholders to be paid the amount, if any, to
      which
      they would be entitled under the Wyoming Corporation Statutes with respect
      to
      the rights of dissenting shareholders. We also changed our par value to $.001
      and the amount of authorized common stock to 100,000,000 shares.





Prior
      to
      1990, we were engaged in the business of exploring for and producing oil and
      gas
      in the Rocky Mountain and mid-continental areas of the United States. We
      liquidated substantially all of its assets in 1990 and were dormant until June
      30, 2000, when it acquired, in a stock for-stock, tax-free exchange, all of
      the
      outstanding common stock of a privately held Virginia corporation, Metwood,
      Inc.
      (“Metwood”), which was incorporated in 1993. See Form 8-K and attached exhibits
      filed August 11, 2000. Metwood has been in the metal and metal/wood construction
      materials manufacturing business since 1992. Following the acquisition, we
      approved a name change from EMC Energies, Inc. to Metwood, Inc.





Effective
      January 1, 2002, Metwood acquired certain assets of Providence Engineering,
      PC
      (“Providence”), a professional engineering firm with customers in the same
      proximity as Metwood, paying $60,000 in cash and issuing 290,000 Metwood common
      shares to the two Providence shareholders (one of whom was also an officer
      and
      existing shareholder of Metwood prior to the acquisition). These shares were
      valued at the closing quoted stock price of $1.00 per share at the effective
      date of the purchase. On October 15, 2002, $15,000 additional cash was paid
      to
      one shareholder in exchange for the shareholder’s surrender of 15,000 shares of
      Metwood stock, and $50,000 was paid to that shareholder in two installments
      of
      $25,000 each (on January 15, 2004 and April 15, 2004) for 275,000 shares. All
      of
      the originally issued 290,000 shares of Metwood stock have thus been repurchased
      as of June 30, 2004. The initial purchase transaction was accounted for under
      the purchase method of accounting.





The
      consolidated company (“the Company, We, Us, Our”) provides construction-related
      products and engineering services to residential customers and contractors,
      commercial contractors, developers and retail enterprises, primarily in
      southwestern Virginia with some distribution in other parts of the
      country.





4
 *Table
          of Contents*





Principal
      Products or Services and Markets





*Metwood
      —* Residential
      builders are aware of the superiority of steel framing vs. wood framing, insofar
      as steel framing is lighter; stronger; termite, pest, rot and fire resistant;
      and dimensionally more stable in withstanding induced loads. Although use of
      steel framing in residential construction has generally increased each year
      since 1980, many residential builders have been hesitant to utilize steel due
      to
      the need to retrain framers and subcontractors who are accustomed to a
“stick-built” construction method where components are laid out and assembled
      with nails and screws. Our founders, Robert Callahan and Ronald Shiflett, saw
      the need to combine the strength and durability of steel with the convenience
      and familiarity of wood and wood fasteners.





Our
      primary products and services are:





•
            Girders
                and headers




•
            Floor
                joists




•
            Floor
                joist reinforcers




•
            Roof
                and floor trusses and rafters




•
            Metal
                framing




•
            Square
                structural columns




•
            Garage,
                deck and porch concrete pour over systems




•
            Garage
                and post-and-beam buildings




•
            Engineering,
                design and custom building services




Metwood
      manufactures light-gage steel construction materials, usually combined with
      wood
      or wood fasteners, for use in residential and commercial applications in place
      of more conventional wood products, which are inferior in terms of strength
      and
      durability. The steel and steel/wood products allow structures to be built
      with
      increased load strength and structural integrity and fewer support beams or
      support configurations, thereby allowing for structural designs that are not
      possible with wood-only products.





*Providence
      —* Extensively
      involved in ongoing product research and development for Metwood, Providence
      also offers its customers civil engineering capabilities which include rezoning
      and special use submissions; erosion and sediment control and storm-water
      management design; residential, commercial, and religious facility site
      development design; and utility design, including water, sewer and onsite
      treatment systems. Providence’s staff is familiar with construction practices
      and has been actively involved in construction administration and inspection
      on
      multiple projects.





Providence
      also performs a variety of structural design and analysis work, successfully
      providing solutions for many projects, including retaining walls, residential
      framing, commercial building framing, light-gage steel fabrication drawings,
      metal building retrofits and additions, mezzanines, and seismic anchors and
      restraints.





Providence
      has designed numerous foundations for a variety of structures. Its foundation
      design expertise includes metal building foundations, traditional building
      construction foundations, atypical foundations for residential structures,
      tower
      foundations, and sign foundations for a variety of uses and applications.





Providence
      has also designed and drafted full building plans for several applications.
      When
      subcontracting with local professional firms, Providence has the ability to
      provide basic architectural, mechanical, electrical, and detailed civil and
      structural design services for these facilities.





Providence
      has reviewed designs by manufacturers for a variety of structures and structural
      components, including retaining walls, radio towers, tower foundations, sign
      foundations, timber trusses, light-gage steel trusses, and light-gage steel
      beams. This service enables clients to take generic designs and have them
      certified and approved for construction in the desired locality.





5
 *Table
          of Contents*




Distribution
      Methods of Products and Services





Our
      sales
      are primarily retail, directly to contractors and do-it-yourself homeowners
      in
      Virginia and North Carolina. Approximately 50% of our sales are wholesale to
      lumberyards, home improvement stores, hardware stores, and plumbing and
      electrical suppliers in Virginia and North Carolina. Metwood relies primarily
      on
      its own sales force to generate sales; additionally, however, our distributors
      in Virginia, New York, Oklahoma, Arizona and Colorado and also utilizes the
      salespeople of wholesale yards stocking our products as an additional sales
      force. We are in discussions with national engineered I-joist manufacturers
      who
      are interested in marketing our products and expect to announce affiliations
      with these companies in the near future. Metwood intends to continue expanding
      the wholesale marketing of its unique products to retailers, to increase dealer
      sales, and to license our technology and products to increase its distribution
      outside of Virginia, North Carolina and the other states.





Status
      of Publicly Announced New Products or Services





We
      have
      acquired four new patents through assignment from Robert Callahan and Ronald
      Shiflett, the patent holders. All four patents reflect various modifications
      to
      our Joist Reinforcing Bracket which will make it even easier for tradesmen
      to
      insert utility conduits through wood joists.





Seasonality
      of Market





Our
      sales
      are subject to seasonal impacts, as its products are used in residential and
      commercial construction projects which tend to be at peak levels in Virginia
      and
      North Carolina between the months of March and October. Accordingly, our sales
      are greater in its fourth and first fiscal quarters. We build an inventory
      of
      its products throughout the winter and spring to support its sales season.





Competition





Nationally,
      there are over one hundred manufacturers of the types of products produced
      by
      us. However, the majority of these manufacturers are using wood-only products
      or
      products without metal reinforcement. Metwood has identified only one other
      manufacturer in the United States that manufactures a wood-metal floor truss
      similar to that of us. However, Metwood has often found that its products are
      the only ones that will work within many customers’ design specs.





Sources
      and Availability of Raw Materials and the Names of Principal Suppliers





All
      of
      the raw materials used by us are readily available on the market from numerous
      suppliers. The light-gage metal used by us is supplied primarily by Dietrich
      Industries, Marino-Ware, and Consolidated Systems, Inc. Our main sources of
      lumber are Lowe’s, 84 Lumber Company and Smith Mountain Building Supply. Gerdau
      Amersteel, Descosteel and Adelphia Metals provide the majority of our rebar.
      Because of the number of suppliers available to us, its decisions in purchasing
      materials are dictated primarily by price and secondarily by availability.
      We do
      not anticipate a lack of supply to affect its production; however, a shortage
      might cause us to pass on higher materials prices to its buyers.





Dependence
      on One or a Few Major Customers





Presently
      we do not have any one customer whose loss would have a substantial impact
      on
      our operations.





Patents





We
      have
      eight U.S. Patents:





U.S.
      Patent No. 5,519,977, “Joist Reinforcing Bracket,” a bracket that reinforces
      wooden joists with a hole for the passage of a utility conduit. We refer to
      this
      as its floor joist patch kit.





U.S.
      Patent No. 5,625,997, “Composite Beam,” a composite beam that includes an
      elongated metal shell and a pierceable insert for receiving nails, screws or
      other penetrating fasteners.





U.S.
      Patent No. 5,832,691, a continuation in part of U.S. Patent No. 5,625,997,
      “Composite Beam,” a composite beam that includes an elongated metal shell and a
      pierceable insert for receiving nails, screws or other penetrating fasteners.





U.S.
      Patent No. 5,921,053, “Internally Reinforced Girder with Pierceable Nonmetal
      Components,” a girder that includes a pair of “c” -shaped members secured
      together so as to form a hollow box which permits the girder to be secured
      within a building structure with conventional fasteners such as nails, screws
      and staples.





U.S.
      Patent Nos. D472,791S; D472,792S; D472,793S; and D477,210S, all modifications
      of
      Metwood’s Joist Reinforcing Bracket, which will be used for repairs of wood
      I-joists.





Each
      of
      these patents was originally issued to the inventors our founders, Robert
      Callahan and Ronald B. Shiflett, who licensed these patents to us.





6
 *Table
          of Contents*




Need
      for Government Approval of Principal Products





Our
      products must either be sold with an engineer’s seal or applicable building code
      approval. Our chief engineer has obtained professional licensure in several
      states, which permits products not building code approved to be sold and used
      with his seal. We expect his licensure in a growing number of states to greatly
      assist in the uniform acceptability of its products as it expands to new
      markets. Currently, we are seeking International Code Council (“ICC”) code
      approval on its joist reinforcers and beams. Once that approval is obtained,
      the
      products can be used in all fifty states and will eliminate the need for an
      engineer’s seal on individual products. To date, our 2x10 floor joist reinforcer
      has received both Bureau Officials Code Association approval (2001) and ICC
      approval (2004).





Time
      Spent During the Last Two Fiscal Years on Research and Development Activities





Approximately
      fifteen percent of our time and resources have been spent during the last two
      fiscal years researching and developing its metal/wood products, new product
      lines, and new patents.





Costs
      and Effects of Compliance with Environmental Laws





We
      do not
      incur any costs to comply with environmental laws. It is an environmentally
      friendly business in that its products are fabricated from recycled steel.





Number
      of Total Employees and Number of Full-Time Employees





We
      had
      thirty-six employees at June 30, 2005, thirty-five of whom were full time.





**Item
      2.** **Description
      of Property**





During
      the year ended June 30, 2005, we sold our facilities to a related party for
      $600,000 and subsequently leased the facilities back under a long-term lease
      agreement. We now lease our facilities in Boones Mill, Virginia, which consist
      of corporate offices, warehouses, a garage/vehicle maintenance building, and
      other multi-use buildings. The condition of these buildings is
      excellent.





We
      do not
      invest in real estate or interests in real estate, real estate mortgages or
      securities of or interests in persons primarily engaged in real estate
      activities and therefore have no policies related to such investments.





**Item
      3.** **Legal
      Proceedings**





We
      are
      not a party to any legal proceedings, nor, to the best of its knowledge, is
      any
      such proceedings threatened or contemplated.





**Item
      4.** **Submission
      of Matters to a Vote of Security Holders**





The
      majority of our shareholders voted in favor of selling our facilities and
      subsequently leasing them back from the purchaser during the year ended June
      30,
      2005.





**PART
      II**





**Item
      5. Market for Common Equity and Related Stockholder Matters**





Because
      there is no active trading market for Metwood, Inc. common stock, it is
      difficult to determine the market value of the stock. Based on the average
      bid
      price for our common stock at September 28, 2005 of $1.10 per share (average
      asking price of $1.10), the market value of shares held by non-affiliates would
      be $13,065,249. There are no preferred shares authorized.





We
      are
      listed on the OTC Bulletin Board of the National Association of Securities
      Dealers (“NASD”) under the symbol “MTWD.OB.”





Set
      forth
      below are the high and low bid prices for our common stock for the last two
      years:




Quarter
                Ended
            High
                Bid
            Low
                BidSeptember
                2003
            $0.30
            $0.30December
                2003
            $0.80
            $0.80March
                2004
            $1.05
            $0.65June
                2004
            $0.60
            $0.60September
                2004
            $0.51
            $0.90December
                2004
            $0.51
            $1.10March
                2005
            $0.60
            $1.01June
                2005
            $0.60
            $1.40





7
 *Table
          of Contents*




Holders





The
      number of holders of record of our common stock as of September 28, 2005 was
      1,115. This number does not include an indeterminate number of stockholders
      whose shares are held by brokers in street name. The number of stockholders
      has
      been substantially the same during the past ten years.





Dividends





Per
      the
      negative covenants in the line-of-credit agreements, we are restricted from
      paying dividends until the debt is repaid. We have not paid any dividends on
      its
      common stock and we intend to pay dividends in the foreseeable future.





**Item
      6. Management’s Discussion and Analysis or Plan of Operation**





Plan
      of Operation





We
      anticipate that the next twelve months will be a period of continued growth
      as
      it seeks to further expand its presence in new markets throughout the United
      States through increased numbers of distributors, licensees and dealers. ICC
      code approval is being sought for our joist reinforcers and beams and is
      expected to be obtained within the coming fiscal year. If this approval is
      obtained, product marketability would be greatly enhanced and would likely
      lead
      to higher demand.





Higher
      product demand would likely increase the need for more capital as inventory
      requirements grew, which could be met through borrowing or a stock offering.
      No
      decision has been made at the present time, however, as to which means might
      be
      used to raise capital.





Management’s
      Discussion and Analysis of Financial Condition and Results of Operations





Below
      are
      selected financial data for the years ended June 30, 2005 and 2004:





2004
            
            2005Revenues
            
            
            
            
            $
            3,109,681
            
            
            
            
            $
            4,181,280Net
                income
            
            
            
            
            $
            222,184
            
            
            
            
            $
            120,995Net
                income per common share
            
            
            
            
            $
            0.02
            
            
            
            
            $
            0.01Weighted
                average common
              shares
                outstanding
            
            
            
            
            
            11,984,082
            
            
            
            
            
            11,876,204At
                June 30, 2005 and 2004:Total
                assets
            
            
            
            
            $
            2,657,034
            
            
            
            
            $
            2,145,088Working
                capital
            
            
            
            
            $
            232,132
            
            
            
            
            $
            1,256,383Shareholders’
                equity
            
            
            
            
            $
            1,636,421
            
            
            
            
            $
            1,765,519**Less
                than $.01





No
      dividends have been declared or paid during the periods presented.





*Results
      of Operations Fiscal 2005 Compared with Fiscal 2004*





*Revenues
      and Cost of Sales —* Consolidated
      gross sales increased $1,071,599, or 34%, for the year ended June 30, 2005
      (“fiscal 2005”) compared to the year ended June 30, 2004 (“fiscal 2004”).
      Construction sales consisted of product sales, engineering, delivery and
      installation fees. Engineering sales consisted of fees for engineering services.
      Gross profit increased $498,079 (38%) from fiscal 2004 to fiscal
      2005.





The
      increase in construction revenues was due to several factors, including adding
      inside sales support for outside sales reps, thereby freeing up the reps to
      make
      more daily contacts; increased marketing efforts, such as regular seminars
      for
      building inspectors and architects on our systems and services; and strengthened
      dealer relationships. Also, product prices were raised in the third quarter
      to
      compensate for the increasing cost of steel. In addition, we experienced
      heightened demand for our pour over systems for fiscal 2005 compared to 2004
      which had the added benefit of increasing related installation fees. Growth
      in
      engineering sales resulted from both higher demand and quicker turnaround time
      on jobs.





Cost
      of
      sales rose $573,520 overall (31%) in fiscal 2005 compared to fiscal 2004. On
      the
      construction side, cost of sales increased $543,086 (33%), while cost of
      engineering sales increased only $30,434 (16%). The rise in construction costs
      was due primarily to the higher steel prices we faced in fiscal 2005. However,
      efforts were made to secure as much steel as possible just prior to the new
      higher prices taking effect, thereby alleviating some of the impact of those
      increases. We anticipate that steel prices will continue to be high for the
      foreseeable future.





*Administrative
      expenses —* These
      costs increased $271,501, or29%, to $1,213,978 in fiscal 2005 from $942,477
      in
      fiscal 2004. The increase was due primarily to higher advertising and marketing,
      insurance and payroll costs. The increase is mainly attributable to an increase
      in payroll costs from $474,660 in fiscal 2004 to $575,904 in fiscal 2005 or
      an
      increase of $101,244 (21%). We hired new personnel to capacitate the increase
      in
      sales and new customers in fiscal 2005.





*Other
      Income (Expense) —* We
      were
      eligible for and received $-0- from the Virginia Department of Business
      Assistance in fiscal 2005 as reimbursement for a portion of its employee
      training efforts compared to $9,244 in fiscal 2004. Due to the sale of our
      facilities in fiscal 2005 as mentioned above, we recorded a loss on the sale
      in
      the amount of $372,011 for fiscal 2005. Interest expense amounted to $16,296
      in
      2005 compared to $25,106 in 2004, a decrease of $8,810 and reflective of a
      complete repayment of our notes payable with the bank in fiscal 2005.




8
 *Table
          of Contents*





*Income
      Taxes —* In
      fiscal
      2005 our income tax expense was $63,599 compared to income tax expense of
      $114,417 in fiscal 2004. We increased our deferred tax liability by $9,947
      in
      2005. The primary components of the deferred tax liability relate to timing
      differences between book and tax depreciation and the treatment of goodwill
      amortization.





*Liquidity
      and Capital Reserves —* Cash
      flows provided by operations in fiscal 2005 were $250,415 versus cash flows
      provided by operations in fiscal 2004 of $212,452, a change of $37,963. The
      increase in cash flows from operations was primarily attributable to lower
      net
      income attributable to the loss on the sale of our facilities and increases
      in
      accounts payable and current income taxes payable, both of which will require
      future cash outlays. We also used $112,649 for capital improvements and
      purchases of fixed assets, while approximately $600,000 was recouped from asset
      disposals in fiscal 2005. Financing activities in fiscal 2005 used $540,895
      compared to $19,827 used in fiscal 2004. The main use of funds in 2004 was
      $50,000 paid to a stockholder for his Metwood common stock, while funds in
      2005
      used in financing activities was a net decrease in borrowings under our
      line-of-credit agreement of $422,000 attributable to the repayment of the notes
      payable in fiscal 2005. We also repaid all notes payables in fiscal
      2005.





We
      have
      historically funded its cash needs through operating income and credit line
      draws as needed. It will continue to rely on sales revenue as its main source
      of
      liquidity and will incur debt primarily to fund inventory purchases as sales
      growth produces increased product demand. Liquidity needs that cannot be met
      by
      current sales revenue may also arise in certain unusual circumstances such
      as
      has previously occurred when rain and snow significantly slowed construction
      activity and resulted in a corresponding decline in demand for our products.
      In
      those circumstances, debt may be added to meet our fixed costs and to maintain
      inventory in anticipation of a spurt in product demand that generally occurs
      once a weather-related slowdown has ended.





On
      a
      long-term basis, we also anticipate that product demand will increase
      considerably as it continues to expand its marketing and advertising campaign,
      which may include the use of television, radio, print and internet advertising.
      Efforts are well underway to increase the number of out-of-state sales
      representatives/brokers who will market our products throughout the country.
      As
      sales increase, we can add a second shift to meet the additional product demand
      without having to use funds to expand its production facilities. If additional
      cash becomes necessary to fund its growth, we may raise this capital through
      an
      additional follow-on stock offering rather than taking on more debt. However,
      there can be no assurance that we will be able to obtain additional equity
      or
      debt financing in the future. If we are unable to raise additional capital
      as
      needed, our growth potential will be adversely affected, and we would have
      to
      significantly modify its plans.





9
 *Table
          of Contents*




**Item
      7. Financial Statements**




REPORT
      OF
      INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM





To
      the
      Board of Directors of


Metwood,
      Inc.





We
      have
      audited the accompanying consolidated balance sheets of Metwood, Inc. (a Nevada
      corporation) and subsidiary as of June 30, 2004 and 2003, and the related
      consolidated statements of income, stockholders’ equity, and cash flows for the
      years then ended. These consolidated financial statements are the responsibility
      of the Company’s management. Our responsibility is to express an opinion on
      these consolidated financial statements based on our audits.





We
      conducted our audits in accordance with auditing standards of the Public Company
      Accounting Oversight Board (United States). Those standards require that we
      plan
      and perform the audits to obtain reasonable assurance about whether the
      consolidated financial statements are free of material misstatement. An audit
      includes examining, on a test basis, evidence supporting the amounts and
      disclosures in the consolidated financial statements. An audit also includes
      assessing the accounting principles used and significant estimates made by
      management, as well as evaluating the overall financial statement presentation.
      We believe that our audits provide a reasonable basis for our opinion.





In
      our
      opinion, the consolidated financial statements referred to above present fairly,
      in all material respects, the financial position of Metwood, Inc. and subsidiary
      as of June 30, 2004 and 2003, and the results of their operations and their
      cash
      flows for the years then ended in conformity with accounting principles
      generally accepted in the United States of America.









***McLeod & Company***





Roanoke,
      Virginia


September
      17, 2004






10
 *Table
          of Contents*


**CONTENTS**REPORT
                    OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING
                    FIRM
                1CONSOLIDATED
                    BALANCE SHEET ASSETS, LIABILITIES AND
                    STOCKHOLDERS’ EQUITY
                2CONSOLIDATED
                    INCOME STATEMENTS
                3CONSOLIDATED
                    STATEMENT OF STOCKHOLDERS’
                    EQUITY
                4CONSOLIDATED
                    STATEMENTS OF CASH FLOWS
                5-6NOTES
                    TO CONSOLIDATED FINANCIAL STATEMENTS
                7-17




11
 *Table
          of Contents*






Bongiovanni
&
        Associates, CPA’s
 **17111
        Kenton Drive, Suite 100-B**
 **Cornelius,
        North Carolina 28031**
 
 **Business:
        (704) 892-8733**
 **Facsimile:
        (704) 892-6487**
 
 
 **REPORT
        OF INDEPENDENDENT REGISTERED PUBLIC ACCOUNTING FIRM**
 
 To
        the
        Board of Directors
 Metwood,
        Inc.
 819
        Naff
        Road
 Boones
        Mill, Virginia 24065
 
 We
        have
        audited the accompanying consolidated balance sheet of Metwood, Inc. (a Nevada
        corporation) and its wholly-owned subsidiary as of June 30, 2005 and the
        related
        consolidated statements of income, stockholders’ equity, and cash flows for the
        year ended June 30, 2005. These consolidated financial statements are the
        responsibility of the Company’s management. Our responsibility is to express an
        opinion on these consolidated financial statements based on our
        audit.
 
 We
        conducted our audit in accordance with auditing standards of the Public Company
        Accounting Oversight Board (United States). Those standards require that
        we plan
        and perform the audit to obtain reasonable assurance about whether the financial
        statements are free from material misstatement. An audit includes examining,
        on
        a test basis, evidence supporting the amounts and disclosures in the financial
        statements. An audit also includes assessing the accounting principles used
        and
        significant estimates made by management, as well as evaluating the overall
        financial statement presentation. We believe that our audit provides a
        reasonable basis for our opinion.
 
 In
        our
        opinion, the consolidated financial statements referred to above present
        fairly,
        in all material respects, the consolidated financial position of Metwood,
        Inc.
        and its wholly owned subsidiary as of June 30, 2005, and the consolidated
        results of its operations and its cash flows for the year ended June 30,
        2005 in
        conformity with accounting principles generally accepted in the United States
        of
        America.
 
 
 
 
 Bongiovanni
        & Associates, P.A.
 Charlotte,
        North Carolina
 September
        23, 2005
 
 
 
 
 
 -1-
 **METWOOD,
        INC. AND WHOLLY OWNED SUBSIDIARY**




12
 *Table
          of Contents*


**METWOOD,
                  INC. AND WHOLLY OWNED SUBSIDIARY****Balance
                  Sheet*****At
                  June 30, 2005***ASSETSCURRENT
                  ASSETSCash
                  and Cash Equivalents
              
              $
              234,607Accounts
                  Receivable, net of Allowance of $8,505
              
              
              484,034Inventory
              
              
              729,461Recoverable
                  Income Taxes
              
              
              30,666Prepaid
                  Expenses and Other Current Assets
              
              
              68,223TOTAL
                  CURRENT ASSETS
              
              
              1,546,991FIXED
                  ASSETSFurniture,
                  Fixtures and Equipment
              
              
              44,173Computer
                  Hardware, Software & Peripherals
              
              
              127,074Machinery
                  and Shop Equipment
              
              
              258,367Vehicles
              
              
              282,046711,660Accumulated
                  Depreciation
              
              
              (366,651
              )Net
                  Fixed Assets
              
              
              345,009OTHER
                  ASSETSGoodwill
              
              
              253,088TOTAL
                  ASSETS
              
              $
              2,145,088LIABILITIES
                  AND STOCKHOLDERS' EQUITYCURRENT
                  LIABILITIESAccounts
                  Payable
              
              $
              218,435Accrued
                  Expenses
              
              
              45,855Customer
                  Deposits
              
              
              5,000Income
                  Taxes Payable
              
              
              21,318TOTAL
                  CURRENT LIABILITIES
              
              
              290,608LONG-TERM
                  LIABILITIESDeferred
                  Income Taxes, Net
              
              $
              88,961COMMITMENT
                  - NOTE 4STOCKHOLDERS'
                  EQUITYCommon
                  Stock ($.001 par value, 100,000,000 shares authorized:11,877,499
                  shares issued and outstanding at June 30, 2005)
              
              
              11,878Common
                  Stock Not Yet Issued ($.001 par value, 10,950 shares)
              
              
              11Additional
                  Paid-in-Capital
              
              
              1,304,818Retained
                  Earnings
              
              
              448,812TOTAL
                  STOCKHOLDERS' EQUITY
              
              
              1,765,519TOTAL
                  LIABILITIES AND STOCKHOLDERS' EQUITY
              
              $
              2,145,088See
                  notes to consolidated audited financial statements and auditors'
                  report




13
 *Table
          of Contents*


**METWOOD,
                  INC. AND WHOLLY OWNED SUBSIDIARY****Income
                  Statements*****For
                  the Years Ending June 30, 2005 and 2004***2005
              
              2004REVENUES
                  AND COST OF SALES:Construction
                  Sales
              
              $
              3,838,966
              
              $
              2,779,220Engineering
                  Sales
              
              
              342,314
              
              
              330,461Gross
                  Sales
              
              
              4,181,280
              
              
              3,109,681Cost
                  of Construction Sales
              
              
              2,181,168
              
              
              1,638,082Cost
                  of Engineering Sales
              
              
              223,112
              
              
              192,678Gross
                  Cost of Sales
              
              
              2,404,280
              
              
              1,830,760Gross
                  Profit
              
              
              1,777,000
              
              
              1,278,921ADMINISTRATIVE
                  EXPENSES:Advertising
              
              
              145,296
              
              
              82,473Construction/Bidding
                  Data
              
              
              14,813
              
              
              18,668Depreciation
              
              
              53,817
              
              
              53,197Insurance
              
              
              53,652
              
              
              43,729Office
                  Expense
              
              
              52,563
              
              
              26,391Payroll
                  Expense
              
              
              575,904
              
              
              474,660Professional
                  Fees
              
              
              43,073
              
              
              43,197Research
                  and Development
              
              
              6,920
              
              
              30,871Telephone
              
              
              28,695
              
              
              22,763Travel
              
              
              24,518
              
              
              15,404Vehicle
                  Expense
              
              
              28,477
              
              
              19,984Other
              
              
              186,250
              
              
              111,140TOTAL
                  EXPENSES
              
              
              1,213,978
              
              
              942,477OPERATING
                  INCOME
              
              
              563,022
              
              
              336,444Loss
                  on Sale of Fixed Assets
              
              
              (372,011
              )
              
              -Other
                  Income (Expense)
              
              
              (6,417
              )
              
              157Income
                  Before Income Taxes
              
              
              184,594
              
              
              336,601Income
                  Taxes
              
              
              (63,599
              )
              
              (114,417
              )Net
                  Income
              
              $
              120,995
              
              $
              222,184Net
                  Income Per Common ShareBasic
                  & Fully Diluted
              
              $
              0.01
              
              $
              0.02Weighted
                  Average CommonShares
                  Outstanding
              
              
              11,876,204
              
              
              11,984,082See
                  notes to consolidated audited financial statements and auditors'
                  report




14
 *Table
          of Contents*




**METWOOD,
                  INC. AND WHOLLY OWNED SUBSIDIARY****Statement
                  of Stockholders' Equity*****For
                  the Years Ending June 30, 2005 and 2004***Common
              
              CommonShares
              
              StockCommon
              
              Common
              
              Not
                  Yet
              
              Not
                  Yet
              
              AdditionalShares
              
              Stock
              
              Issued
              
              Issued
              
              Paid-in
              
              Retained(000's)
              
              ($.001
                  Par)
              
              (000's)
              
              ($.001
                  Par)
              
              Capital
              
              EarningsBalances,
                  July 1, 2003
              
              
              12,046
              
              $
              12,046
              
              
              11
              
              
              11
              
              $
              1,343,047
              
              $
              105,633Net
                  income for year
              
              
              -0-
              
              
              -0-
              
              
              -0-
              
              
              -0-
              
              
              -0-
              
              
              222,184Common
                  stock retired
              
              
              (275
              )
              
              (275
              )
              
              -0-
              
              
              -0-
              
              
              (49,725
              )
              
              -0-Issuance
                  of common stock for services
              
              
              5
              
              
              5
              
              
              -0-
              
              
              -0-
              
              
              3,495
              
              
              -0-Issuance
                  of common stock subscribed
              
              
              8
              
              
              8
              
              
              (8
              )
              
              (8
              )
              
              -0-
              
              
              -0-Previously
                  canceled common stock reinstated
              
              
              79
              
              
              79
              
              
              -0-
              
              
              -0-
              
              
              (79
              )
              
              -0-Balances,
                  June 30, 2004
              
              
              11,863
              
              $
              11,863
              
              
              3
              
              $
              3
              
              $
              1,296,738
              
              $
              327,817Net
                  income for year
              
              
              -0-
              
              
              -0-
              
              
              -0-
              
              
              -0-
              
              
              -0-
              
              
              120,995Common
                  stock subscribed but not yet issued
              
              
              -0-
              
              
              -0-
              
              
              8
              
              
              8
              
              
              -0-
              
              
              -0-Issuance
                  of common stock for services rendered
              
              
              3
              
              
              3
              
              
              -0-
              
              
              -0-
              
              
              1,967
              
              
              -0-Issuance
                  of common stock subscribed
              
              
              12
              
              
              12
              
              
              -0-
              
              
              -0-
              
              
              6,113
              
              
              -0-Balances,
                  June 30, 2005
              
              
              11,878
              
              $
              11,878
              
              
              11
              
              $
              11
              
              $
              1,304,818
              
              $
              448,812See
                  notes to consolidated audited financial statements and auditors'
                  report




15
 *Table
          of Contents*




**METWOOD,
                  INC. AND WHOLLY OWNED SUBSIDIARY****Statements
                  of Cash Flows*****For
                  the Years Ending June 30, 2005 and 2004***2005
              
              2004CASH
                  FLOWS FROM OPERATING ACTIVITIES:Net
                  income
              
              $
              120,995
              
              $
              222,184Adjustments
                  to reconcile net income to netcash
                  provided by operating activities:Depreciation
              
              
              108,536
              
              
              99,616Bad
                  debt expense
              
              
              8,855
              
              
              12,302Provision
                  for deferred income taxes
              
              
              (9,947
              )
              
              31,689Loss
                  on sale of fixed assets
              
              
              372,011
              
              
              -Common
                  stock issued for services
              
              
              1,970
              
              
              3,500(Increase)
                  decrease in operating assets:Accounts
                  receivable
              
              
              (80,258
              )
              
              (144,519
              )Inventory
              
              
              (96,236
              )
              
              (286,755
              )Prepaid
                  expenses and other current assets
              
              
              (40,874
              )
              
              (13,812
              )Recoverable
                  income taxes
              
              
              (30,666
              )
              
              25,187Increase
                  (decrease) in operating liabilities:Accounts
                  payable, accrued expenses and customer deposits
              
              
              (65,462
              )
              
              203,233Current
                  income taxes payable
              
              
              (38,509
              )
              
              59,827NET
                  CASH PROVIDED BY OPERATING ACTIVITIES
              
              
              250,415
              
              
              212,452CASH
                  FLOWS FROM INVESTING ACTIVITIES:Disposals
                  of fixed assets
              
              
              600,000
              
              
              2,314Expenditures
                  for fixed assets
              
              
              (112,649
              )
              
              (166,685
              )NET
                  CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES
              
              
              487,351
              
              
              (164,371
              )CASH
                  FLOWS FROM FINANCING ACTIVITIES:Common
                  stock retired
              
              
              -
              
              
              (50,000
              )Proceeds
                  from issuance of common stock
              
              
              6,125
              
              
              -Borrowings
                  from (repayment of) notes payable
              
              
              (125,020
              )
              
              2,419Net
                  borrowings from (repayment of) related party
              
              
              -
              
              
              10,154Net
                  borrowings from (repayment of) line of credit
              
              
              (422,000
              )
              
              17,600NET
                  CASH (USED IN) FINANCING ACTIVITIES
              
              
              (540,895
              )
              
              (19,827
              )NET
                  INCREASE IN CASH AND CASH EQUIVALENTS
              
              
              196,871
              
              
              28,254CASH
                  AND CASH EQUIVALENTS:Beginning
                  of year
              
              
              37,736
              
              
              9,482End
                  of year
              
              $
              234,607
              
              $
              37,736See
                  notes to consolidated audited financial statements and auditors'
                  report




16
 *Table
          of Contents*


**Consolidated
        Notes To Audited Financial Statements**
 **For
        the Years Ended June 30, 2005 and 2004**
 
  **NOTE
        A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES**
 
 Business
        Activity -
        Metwood, Inc. (the Company) was organized under the laws of the State of
        Virginia on April 7, 1993.
 
 Effective
        June 30, 2000, the Company entered an Agreement and Plan of Reorganization
        to
        acquire the majority of the outstanding common stock of a publicly held shell
        corporation. The acquisition resulted in a tax-free exchange for federal
        and
        state income tax purposes. Upon acquisition, the name of the shell corporation
        was changed to Metwood, Inc. (a Nevada corporation). Metwood, Inc. (a Virginia
        corporation) became a wholly owned subsidiary of Metwood, Inc. (a Nevada
        corporation). The transaction was accounted for as a reverse merger in
        accordance with Accounting Principles Board (“APB”) Opinion No. 16 wherein the
        stockholders of Metwood, Inc. (a Virginia corporation) retained the majority
        of
        the outstanding common stock of the Company after the merger. The publicly
        traded shell corporation did not have a material operating history for several
        years prior to the merger.
 
 Effective
        January 1, 2002, the Company acquired certain assets of Providence Engineering,
        PC (“Providence”), a professional engineering firm with customers in the same
        proximity as the Company. The total purchase price of $350,000 was paid with
        $60,000 in cash and with 290,000 shares of the Company’s common stock to the two
        Providence shareholders. These shares were valued at the closing active quoted
        market price of the stock at the effective date of the purchase, which was
        $1.00
        per share. One of the shareholders of Providence was also an officer and
        existing shareholder of the Company prior to the acquisition. The transaction
        was accounted for under the purchase method of accounting, and the purchase
        price was allocated as follows:
  Accounts
                  receivable
              
              $
              75,000Fixed
                  assets
              
              
              45,000Goodwill
              
              
              230,000Total
              
              $
              350,000
 
 During
        the year ended June 30, 2003, liabilities assumed at the date of acquisition
        were identified and paid. The amount of the liabilities paid was $23,088
        and has
        been added to goodwill.
 
 The
        consolidated company provides construction-related products and engineering
        services to residential customers and contractors, commercial contractors,
        developers and retail enterprises, primarily in southwestern Virginia.
   
 -8-
 **METWOOD,
        INC. AND WHOLLY OWNED SUBSIDIARY**
  17
 *Table
            of Contents*
  **Consolidated
        Notes To Audited Financial Statements**
 **For
        the Years Ended June 30, 2005 and 2004**
 
  **NOTE
        A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT.)**
 
 Basis
        of Presentation —
        The
        financial statements include the accounts of Metwood, Inc. (a Nevada
        corporation) and its wholly owned subsidiary, Metwood Inc. (a Virginia
        corporation) prepared in accordance with accounting principles generally
        accepted in the United States of America and pursuant to the rules and
        regulations of the Securities and Exchange Commission. All significant
        intercompany balances and transactions have been eliminated.
 
 Fair
        Value of Financial Instruments - The
        carrying amounts reported in the consolidated balance sheet for cash, accounts
        receivable, inventory, accounts payable and accrued expenses approximate
        fair
        values based on the short-term maturity of these instruments.
 
 Accounts
        Receivable —
        The
        Company grants credit in the form of unsecured accounts receivable to its
        customers based on an evaluation of their financial condition. The Company
        performs ongoing credit evaluations of its customers. The estimate of the
        allowance for doubtful accounts, which is charged off to bad debt expense,
        is
        based on management’s assessment of current economic conditions and historical
        collection experience with each customer. At June 30, 2005 allowance for
        doubtful accounts was $8,505. Specific customer receivables are considered
        past
        due when they are outstanding beyond their contractual terms and are charged
        off
        to the allowance for doubtful accounts when determined uncollectible. For
        the
        years ended June 30, 2005 and 2004, the bad debt expense was $8,855 and $12,302,
        respectively.
 
 Fixed
        Assets - Fixed
        assets are recorded at cost and include expenditures that substantially increase
        the productive lives of the existing assets. Maintenance and repair costs
        are
        expensed as incurred. Depreciation is provided using the straight-line method.
        Depreciation of fixed assets is calculated over management prescribed recovery
        periods that range from three to thirty years.
 
 When
        a
        fixed asset is disposed of, its cost and related accumulated depreciation
        are
        removed from the accounts. The difference between undepreciated cost and
        the
        proceeds from disposition is recorded as a gain or loss.
 
 Management’s
        Use of Estimates —
        The
        preparation of consolidated financial statements in conformity with accounting
        principles generally accepted in the United States of America requires
        management to make estimates and assumptions that affect the reported amounts
        of
        assets and liabilities and disclosures of contingent assets and liabilities
        at
        the date of consolidated financial statements and the reported amounts of
        revenues and expenses during the reporting period. At June 30, 2005, the
        significant estimates used by management include the valuation of its goodwill.
        Actual results could differ from those estimates.
 
 
 
 -9-
 **METWOOD,
        INC. AND WHOLLY OWNED SUBSIDIARY**
  18
 *Table
            of Contents*
  **Consolidated
        Notes To Audited Financial Statements**
 **For
        the Years Ended June 30, 2005 and 2004**
 
  **NOTE
        A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT.)**
 
 Cash
        and Cash Equivalents —
        For
        purposes of the Consolidated Statements of Cash Flows, the Company considers
        liquid investments with an original maturity of three months or less to be
        cash
        equivalents. The Company maintains its cash in bank deposit accounts, which,
        at
        times, may exceed the federally insured limit of $100,000. The Company has
        not
        experienced any losses in such accounts. The Company believes it is not exposed
        to any significant credit risk on cash and cash equivalents.
 
 Revenue
        Recognition —
        Revenue
        is recognized when goods are shipped and earned or when services are performed,
        provided collection of the resulting receivable is probable. If any material
        contingencies are present, revenue recognition is delayed until all material
        contingencies are eliminated. Further, no revenue is recognized unless
        collection of the applicable consideration is probable.
 
 Income
        Taxes —
        Income
        taxes are accounted for in accordance with SFAS No. 109, “Accounting for Income
        Taxes.” A deferred tax asset or liability is recorded for all temporary
        differences between financial and tax reporting and for net operating loss
        carry
        forwards, where applicable. Deferred tax assets are reduced by a valuation
        allowance when, in the opinion of management, it is more likely than not
        that
        some portion or the entire deferred tax asset will not be realized. Deferred
        tax
        assets and liabilities are adjusted for the effect of changes in tax laws
        and
        rates on the date of enactment.
 
 Earnings
        Per Common Share —
        Basic
        earnings per share amounts are based on the weighted average shares of common
        stock outstanding. If applicable, diluted earnings per share would assume
        the
        conversion, exercise or issuance of all potential common stock instruments
        such
        as options, warrants and convertible securities, unless the effect is to
        reduce
        a loss or increase earnings per share. This presentation has been adopted
        for
        the years presented. There were no adjustments required to net income for
        the
        years presented in the computation of diluted earnings per share.
 
 Advertising —
        The
        Company expenses advertising costs as incurred. However, certain expenditures
        are treated as prepaid (such as trade show fees) if they are for goods or
        services which will not be received until after the end of the accounting
        period, and they are subsequently recognized as expenses in those periods
        in
        which the goods or services are received.
 
 Inventory -
        Inventory, consisting of metal and wood raw materials located in the Company’s
        leased premises and is stated at the lower of cost or market using the first-in,
        first-out (FIFO) method.
 
 
 -10-
 **METWOOD,
        INC. AND WHOLLY OWNED SUBSIDIARY**
  19
 *Table
            of Contents*
  **Consolidated
        Notes To Audited Financial Statements**
 **For
        the Years Ended June 30, 2005 and 2004**
 
  **NOTE
        A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT.)**
 
 Patents —
        The
        Company has been assigned several key product patents developed by certain
        Company officers. No value has been recorded in the Company’s financial
        statements because the fair value of the patents was not determinable within
        reasonable limits at the date of assignment.
 
 Research
        and Development —
        The
        Company performs research and development on its metal/wood products, new
        product lines, and new patents. Costs, if any, are expensed as they are
        incurred. For the years ended June 30, 2005 and 2004, the expenses relating
        to
        research and development were $6,920 and $30,872, respectively.
 
 Goodwill —
        In June
        2001 the Financial Accounting Standards Board (“FASB”) issued Statement of
        Financial Accounting Standards (“SFAS”) No. 142, “Goodwill and Other Intangible
        Assets.” This statement requires that goodwill and intangible assets deemed to
        have an indefinite life not be amortized. Instead, such assets are to be
        tested
        for impairment annually or immediately if conditions indicate that such an
        impairment could exist. Transition to the new rules of SFAS 142 requires
        the
        completion of a transitional impairment test of goodwill within the first
        year
        of adoption. The Company adopted the provisions of SFAS 142 beginning July
        1,
        2002 and completed the transitional impairment test of goodwill as of July
        1,
        2002 and again as of June 30, 2004 and 2005 using discounted cash flow estimates
        and found no goodwill impairment.
 
 Recent
        Accounting Pronouncements -
        In
        January 2003, the FASB issued FIN No. 46, "Consolidation of Variable Interest
        Entities". FIN No. 46 requires the consolidation of entities that cannot
        finance
        their activities without the support of other parties and that lack certain
        characteristics of a controlling interest, such as the ability to make decisions
        about the entity's activities via voting rights or similar rights. The entity
        that consolidates the variable interest entity is the primary beneficiary
        of the
        entity's activities. FIN No. 46 applies immediately to variable interest
        entities created after January 31, 2003, and must be applied in the first
        period
        beginning after June 15, 2003 for entities in which an enterprise holds a
        variable interest entity that it acquired before February 1, 2003. The Company
        plans to adopt this Interpretation in the first quarter of fiscal 2004.
 
 In
        January 2003, the EITF released Issue No. 00-21, ("EITF 00-21"), "Revenue
        Arrangements with Multiple Deliveries", which addressed certain aspects of
        the
        accounting by a vendor for arrangement under which it will perform multiple
        revenue-generating activities. Specifically, EITF 00-21 addresses whether
        an
        arrangement contains more than one unit of accounting and the measurement
        and
        allocation to the separate units of accounting in the arrangement. EITF 00-21
        is
        effective for revenue arrangements entered into in fiscal periods beginning
        after June 15, 2003. The adoption of this standard will not have an impact
        on
        the Company's financial statements.
 
 
 
 -11-
 **METWOOD,
        INC. AND WHOLLY OWNED SUBSIDIARY**
  20
 *Table
            of Contents*
  **Consolidated
        Notes To Audited Financial Statements**
 **For
        the Years Ended June 30, 2005 and 2004**
 
  **NOTE
        A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT.)**
 
 Recent
        Accounting Pronouncements (Cont.) -
        In **** May
        2003,
        the FASB issued SFAS No. 149, "Amendment of Statement 133 on Derivative
        Instruments and Hedging Activities." SFAS No. 149 amends and clarifies
        accounting for derivative instruments, including certain derivative instruments
        embedded in other contracts, and for hedging activities under SFAS No. 133.
        SFAS
        No. 149 is effective for contracts entered into or modified after June 30,
        2003
        and for hedging relationships designated after June 30, 2003. The Company
        does
        not believe that there will be any impact on its financial statements.
 
 In
        May
        2003, the FASB issued SFAS No. 150, "Accounting for Certain Financial
        Instruments with Characteristics of both Liabilities and Equity." SFAS No.
        150
        establishes standards for how companies classify and measure certain financial
        instruments with characteristics of both liabilities and equity. It requires
        companies to classify a financial instrument that is within its scope as
        a
        liability (or an asset in some circumstances). SFAS No. 150 is effective
        for
        financial
 instruments
        entered into or modified after May 31, 2003. The standard will not impact
        the
        Company's financial statements.
 
 In
        December 2004, the FASB issued SFAS No. 123(R), "Accounting for Stock-Based
        Compensation". SFAS 123(R) establishes standards for the accounting for
        transactions in which an entity exchanges its equity instruments for goods
        or
        services. This Statement focuses primarily on accounting for transactions
        in
        which an entity obtains employee services in share-based payment transactions.
        SGAS 123(R) requires that the fair value of such equity instruments be
        recognized as expense in the historical financial statements as services
        are
        performed. Prior to SFAS 123(R), only certain pro-forma disclosures of fair
        value were required. SFAS 123(R) shall be effective for the Company as of
        the
        beginning of the first interim or annual reporting period that begins after
        December 15, 2005. The adoption of this new accounting pronouncement is expected
        to have a material impact on the financial statements of the Company commencing
        with the third quarter of the year ending September 30, 2006. Small business
        issuers need not comply with the new standard until fiscal periods beginning
        after December 15, 2005. We already disclose expense of employee stock options
        for annual and quarterly periods on fair value calculation according to SFAS
        No.123.
 
 In
        November 2004, the FASB issued SFAS No. 151, “Inventory Costs” (SFAS 151). This
        Statement amends the guidance in ARB No. 43, Chapter 4, “Inventory Pricing,” to
        clarify the accounting for abnormal amounts of idle facility expense, freight,
        handling costs, and wasted material (spoilage). SFAS 151 requires that those
        items be recognized as current-period charges. In addition, this Statement
        requires that allocation of fixed production overheads to the costs of
        conversion be based on the normal capacity of the production facilities.
        The
        provisions of SFAS 151 are effective for inventory costs incurred in fiscal
        years beginning after June 15, 2005.
 
 
 -12-
 **METWOOD,
        INC. AND WHOLLY OWNED SUBSIDIARY**
  21
 *Table
            of Contents*
  **Consolidated
        Notes To Audited Financial Statements**
 **For
        the Years Ended June 30, 2005 and 2004**
 
 **NOTE
        B - SUPPLEMENTAL CASH FLOW INFORMATION**
 
 Supplemental
        disclosures of cash flow information for the years ended June 30, 2004 and
        2005
        are summarized as follows:
 
 2004
              
              2005Cash
                  paid for:Income
                  taxes
              
              $
              —
              
              $
              141,917Interest
              
              $
              21,888
              
              $
              16,296Supplemental
                  disclosures of non-cash investing and financing activities:2004
              
              
              2005Vehicles
                  acquired with notes payable
              
              $
              16,000
              
              $
              —Fixed
                  assets acquired by exchange of related party receivable
              
              $
              160,555
              
              $
              —Land
                  transferred in payment for services
              
              $
              (89,000
              )
              $
              —
 
 **NOTE
        C - RELATED PARTY TRANSACTIONS**
 
 For
        the
        year s
        ended
        June 30, 2005 and 2004, the Company had sales of $129,234 and $98,428 to
        its
        shareholder and CEO, Robert Callahan, respectively. As of June 30, 2005,
        the
        related receivable with Mr. Callahan was $-0-.
 
 Also,
        from time to time, the Company contracts with a construction company 50%
        owned
        by the Company’s CEO which provides capital improvements and maintenance work on
        the Company’s buildings and grounds. During the years ended June 30, 2005 and
        2004, the construction company billed the Company $-0- and $160,555,
        respectively, for its services. The Company also purchased two vehicles from
        the
        construction company for a total of $16,000 during the year ended June 30,
        2004.
 
 During
        the year ended June 30, 2004, the Company transferred land at its book and
        fair
        market value of $89,000 to the construction company in partial payment of
        the
        amounts due the construction company. Additionally, because the construction
        company is owned by the Company’s CEO, the Company’s receivable from its CEO was
        reduced by offsetting it against the Company’s payable to the related
        construction company.
 
 
 
 
 
 
 
 -13-
 **METWOOD,
        INC. AND WHOLLY OWNED SUBSIDIARY**
  22
 *Table
            of Contents*
  **Consolidated
        Notes To Audited Financial Statements**
 **For
        the Years Ended June 30, 2005 and 2004**
 
  **NOTE
        D - COMMITMENT**
 
 During
        the year ended June 30, 2003, the Company implemented a stock-based incentive
        compensation plan for its employees. Participating employees have an after-tax
        deduction withheld by the Company throughout the calendar year. As of December
        31 of each year, the employee is considered vested in the plan, and the Company
        will match the participating employee’s withheld amounts. The Company may also
        make a discretionary contribution based upon pay incentives or attendance.
        Periodically, the Company will purchase restricted stock on behalf of the
        employee in the amount of his withholdings, the Company’s match, and any
        discretionary contributions.
 
 As
        of
        June 30, 200 5,
        the
        Company had ten participating employees who withheld an amount immaterial
        to the
        consolidated financial statements. No accrual for the Company’s match has been
        made in the current year.
 
 **NOTE
        E - SHORT-TERM BORROWINGS AND CREDIT ARRANGEMENTS**
 
 The
        Company has available a $600,000 revolving line of credit with a local bank.
        Interest is payable monthly on the outstanding balance at the prime lending
        rate, which was 4.0% as of June 30, 200 5.
        The
        note is secured by accounts receivable, equipment, general intangibles,
        inventory, and fixtures and furniture and is personally guaranteed by the
        Company’s CEO. The balance outstanding as of June 30, 2005 was $-0- because the
        Company fully repaid the line with the proceeds from the sale of its facilities
        during the year ended June 30, 2005. See
        footnote G below for discussion of the sale.
 
 In
        addition, the Company fully repaid its bank notes payable and credit corporation
        note in full during the year ended June 30, 2005 with the proceeds from the
        sale
        of its facilities.
 
 **NOTE
        F - EQUITY**
 
 During
        the year s
        ended
        June 30, 2005 and 2004, the Company issued 3,300 and 11,200 common shares
        in
        payment for services valued at $1,970 and $9,600, respectively. These shares
        were valued
        at
        the fair market value of the shares at the time of issuance as determined
        by a
        third party source. The
        Company also retired 275,000 common shares previously issued to a shareholder
        and Metwood officer in exchange for $50,000 cash during the year ended June
        30,
        2004.
 
 During
        the year ended June 30, 2005, the Company issued 12,450 common shares in
        exchange for cash in the amount of $6,125.
 
 
 -14-
 **METWOOD,
        INC. AND WHOLLY OWNED SUBSIDIARY**
  23
 *Table
            of Contents*
  **Consolidated
        Notes To Audited Financial Statements**
 **For
        the Years Ended June 30, 2005 and 2004**
 
  **NOTE
        G - SALE OF FIXED ASSETS AND RELATED OPERATING LEASE**
 
 During
        the year ended June 20, 2005, the Company entered into a sales and leaseback
        transaction with a related party. The Company sold its various buildings
        at its
        corporate headquarters which house its manufacturing plants, executive offices,
        and other buildings for $600,000 in cash. The Company simultaneously entered
        into a commercial lease agreement with this entity whereby the Company is
        committed to lease back these same properties for $6,200 per month over a
        ten
        year term expiring on December 31, 2014. Rent expense charged to operations
        for
        the year ended June 30, 2005 was $37,300.
 
 Future
        minimum rental payments as of December 31, 2004 in the aggregate and for
        each of
        the five succeeding years and thereafter are as follows:
  Year
                
                Amount2006
                
                $
                74,4002007
                
                
                74,4002008
                
                
                74,4002009
                
                
                74,4002010
                
                
                74,400Thereafter
                
                
                334,800$
                706,800
 
 **NOTE
        H - INCOME TAXES**
 
 The
        components of income tax expense consist of:
  2004
                
                2005Current:Federal
                
                $
                67,788
                
                $
                46,785State
                
                
                14,940
                
                
                6,86782,728
                
                
                53,652Deferred:Federal
                
                
                25,219
                
                
                5,111State
                
                
                6,470
                
                
                4,83631,689
                
                
                9,947Total
                    income tax expense
                
                $
                114,417
                    $
                
                
                63,599
 
 
 
 
 
 -15-
 **METWOOD,
        INC. AND WHOLLY OWNED SUBSIDIARY**
  24
 *Table
            of Contents*
  **Consolidated
        Notes To Audited Financial Statements**
 **For
        the Years Ended June 30, 2005 and 2004**
 
  **NOTE
        H - INCOME TAXES (CONT.)**
 
 The
        reconciliation of the provision for income taxes at the U. S. federal statutory
        income tax rate of 39% to the Company’s income taxes is as follows:
  Income
                  before income taxes
              
              $
              336,601
              
              $
              184,594Income
                  tax expense computed at the statutory rate
              
              
              131,274
              
              
              71,992State
                  income tax, net of federal tax effect
              
              
              13,060
              
              
              6,867Non-deductible
                  expenses
              
              
              1,576
              
              
              (1,693
              )Tax-exempt
                  state workforce development funding
              
              
              (3,605
              )
              
              (4,086
              )Effect
                  of graduated income tax rates
              
              
              (30,013
              )
              
              (9,481
              )Other
              
              
              2,125
              
              
              —Total
                  income tax expense
              
              $
              114,417
              
              $
              63,599
 
 Deferred
        income taxes reflect the net tax effects of temporary differences between
        the
        carrying amounts of assets and liabilities for financial reporting purposes
        and
        the amount used for federal and state income tax purposes. Deferred tax
        liabilities at June 30, 2005 were $89,993, net of deferred tax assets of
        $1,032.
        The components of these amounts are as follows:
  Depreciation
              $
              71,197Amortization
                  of goodwill
              
              18,796Restricted
                  stock compensation
              
              (1,032
              )Net
                  deferred tax liabilities
              $
              88,961
 
 **NOTE
        I - CONCENTRATIONS**
 
 There
        is
        no single customer or group of related customers from whom the Company derived
        more than 10% of its accounts receivable as of June 30, 2005. The Company
        is
        potentially vulnerable to a concentration-related risk with respect to its
        metal
        suppliers, however, since three vendors supply approximately 70% of the metal
        used in the manufacture of the Company’s products, though these vendors have
        been used primarily because of their competitive pricing. Several other metal
        suppliers are available to the Company, but purchasing from them, should
        that
        become necessary, would likely result in increased costs.
  
 
 
 -16-
 **METWOOD,
        INC. AND WHOLLY OWNED SUBSIDIARY**
  25
 *Table
            of Contents*
  **Consolidated
        Notes To Audited Financial Statements**
 **For
        the Years Ended June 30, 2005 and 2004**
 
  **NOTE
        J - SEGMENT INFORMATION**
  The
        Company operates in two principal business segments: (1) construction-related
        products and (2) engineering services. Performance of each segment is evaluated
        based on profit or loss from operations before income taxes. These reportable
        segments are strategic business units that offer different products and
        services. Summarized revenue and expense information by segment for the years
        ended June 30, 2004 and 2005 is as follows:
 
 2004
              
              2005Construction:Sales
              $
              2,779,220
              
              $
              3,838,966Cost
                  of sales
              
              (1,638,082
              )
              
              (2,181,168
              )Corporate
                  and other expenses
              
              (958,647
              )
              
              (1,579,875
              )Segment
                  income
              $
              182,491
              
              $
              77,923Total
                  assets
              $
              2,245,164
              
              $
              1,724,298Capital
                  expenditures
              $
              317,377
              
              $
              96,764Depreciation
              $
              87,695
              
              $
              95,980Interest
                  expense
              $
              22,392
              
              $
              16,288
 
 2004
              
              
              2005Engineering:Sales
              $
              330,461
              
              $
              342,314Cost
                  of sales
              
              (192,678
              )
              
              (223,112
              )Corporate
                  and other expenses
              
              (98,101
              )
              
              (76,130
              )Segment
                  income
              $
              39,682
              
              $
              43,072
              )Total
                  assets
              $
              411,870
              
              $
              420,790Capital
                  expenditures
              $
              9,863
              
              $
              15,885Depreciation
              $
              11,921
              
              $
              12,556Interest
                  expense
              $
              —
              
              $
              8
   -17-


26
 *Table
          of Contents*




**Item
      8A. Controls and Procedures**





a.
            Our
                Chief Executive Officer and Chief Financial Officer have evaluated
                the
                effectiveness of our disclosure controls and procedures, as defined
                in
                Rules 13a-15(e) under the Securities Exchange Act of 1934 (the “Exchange
                Act”), as of the end of the period covered by this Annual Report (the
                “Evaluation Date”). Based on such evaluation, such officers have concluded
                that, as of the Evaluation Date, our disclosure controls and procedures
                are effective in alerting our management on a timely basis to material
                information required to be disclosed in our reports filed under the
                Exchange Act.




b.
            There
                have been no significant changes in our internal controls or in other
                factors that could significantly affect such controls since the Evaluation
                Date.







**PART
      III**


**Item
      9. Directors and Executive Officers of the Registrant**





Identification
      of Directors and Executive Officers





The
      following table sets forth the names and the nature of all positions and offices
      held by all directors and executive officers for the year ending June 30, 2005
      and to the date of the filing of this report and the periods during which each
      such director or executive officer has served in his or her respective
      positions:





**Name**
            **Position
                and Background****Robert
                M. Callahan**
            **President**




Mr.
                Callahan has been involved in the building industry for over thirty
                years.
                He is well recognized in southwestern Virginia as an innovator in
                the uses
                of passive solar design and wood/metal products in custom home building.
                Along with Mr. Ronald Shiflett, he formed Metwood, Inc. in 1993 to
                bring
                light-gage construction, used in commercial building for years, into
                common use in residential construction.








**Shawn
                A. Callahan**
            **Secretary/Treasurer,
              Vice President/General Manager, Chief Financial Officer**Education:
                 B.S. Computer Science and Mathematics, Virginia Military
                Institute




Since
                starting with Metwood, Inc. in May 1996, Mr. Callahan has played
                a major
                role in our restructuring, increasing production, improving efficiency,
                and developing computer aids for us.




**Ronald
                B. Shiflett**
            **Vice
                President**Education:
                 B.S. Civil Engineering, Virginia Polytechnic Institute & State
                University
              M.S.
                Civil Engineering, Virginia Polytechnic Institute & State University




Mr.
                Shiflett has been engaged in the structural design of industrial,
                commercial, residential, and institutional buildings for over twenty-five
                years. He is recognized by the design community in southwestern Virginia
                as an innovator in the use and design of light-gage steel framing
                in
                building construction. Along with Mr. Callahan, he formed Metwood,
                Inc. in
                1993.





Term
      of Office





The
      term
      of office of the current directors shall continue until new directors are
      elected or appointed.





Family
      Relationships





Robert
      Callahan is the father of Shawn Callahan.





Involvement
      in Certain Legal Proceedings





Except
      as
      indicated below and to the knowledge of management, during the past five years,
      no present or former director, person nominated to become a director, executive
      officer, promoter or control person of us:





(1)    
      was a general partner or executive officer of any business by or against which
      any bankruptcy petition was filed, whether at the time of such filing or two
      years prior thereto;




27
 *Table
          of Contents*





(2)    
      was convicted in a criminal proceeding or named the subject of a pending
      criminal proceeding (excluding traffic violations and other minor offenses);





(3)    
      was the subject of any order, judgment or decree, not subsequently reversed,
      suspended or vacated, of any court of competent jurisdiction, permanently or
      temporarily enjoining, barring, suspending or otherwise limiting his involvement
      in any type of business, securities or banking activities;





(4)    
      was the subject of any order, judgment or decree, not subsequently reversed,
      suspended or vacated, of any federal or state authority barring, suspending
      or
      otherwise limiting for more than sixty days the right of such person to engage
      in any activity described above under this Item, or to be associated with
      persons engaged in any such activity; or





(5)    
      was found by a court of competent jurisdiction (in a civil action), the
      Commission or the Commodity Futures Trading Commission to have violated a
      federal or state securities or commodities law, nor has a judgment been
      reversed, suspended, or vacated.





Compliance
      with Section 16(a) of the Exchange Act





Section
      16(a) of the Securities Exchange Act of 1934, as amended, requires our
      directors, officers and persons who own more than 10% of our common stock or
      other registered class of equity securities to file reports of ownership and
      changes in ownership with the Securities and Exchange Commission. Officers,
      directors and greater than 10% shareholders are required to furnish us with
      copies of all Section 16(a) forms they file.





Based
      solely on a review of the forms received covering purchase and sale transactions
      in our common stock during the fiscal year ended June 30, 2005, we believe
      that
      each person who, at any time during that period, was a director, executive
      officer, or beneficial owner of more than 10% of our common stock complied
      with
      all Section 16(a) filing requirements except as follows: Ronald Shiflett failed
      to timely report sale transactions in January and April 2004.





**Item
      10. Executive Compensation**





The
      following table sets forth in summary form the compensation received during
      each
      of our last three fiscal years by our President and Chief Executive Officer,
      Robert M. Callahan:





***Summary
      Compensation Table***





**Fiscal**
              **Year**
            
            **Annual**
              **Salary**
            
            **Bonuses**
            
            **Other**
              **Compen-**
              **sation**
            
            **Restricted**
              **Stock**
              **Awards**
            
            **LTIP**
              **Options**
            
            **Restricted**
              **Stock**
              **Bonuses**(1)
            
            (2)
            
            (3)
            
            (4)
            
            (5)
            
            (5)2005
            
            $120,000
            
            -0-
            
            -0-
            
            -0-
            
            -0-
            
            -0-2004
            
            $109,200
            
            -0-
            
            -0-
            
            -0-
            
            -0-
            
            -0-2003
            
            $97,500
            
            -0-
            
            -0-
            
            -0-
            
            -0-
            
            -0-





(1)
            The
                dollar value of base salary (cash and non-cash) received, including
                amounts paid to Carolyn Callahan, wife of Robert M. Callahan.





(2)
            The
                dollar value of bonuses (cash and non-cash) received.





(3)
            During
                the periods covered by the table, we did not pay any other annual
                compensation not properly categorized as salary or bonus, including
                perquisites and other personal benefits, securities or property.





(4)
            During
                the periods covered by the table, we did not make any award of restricted
                stock.





(5)
            We
                currently have no stock option or restricted stock bonus plans.





No
      member
      of our management has been granted any option or stock appreciation right;
      accordingly, no tables relating to such items have been included within this
      item.





Compensation
      of Directors





There
      are
      no standard arrangements pursuant to which our directors are compensated for
      any
      services provided as director. No additional amounts are payable to our
      directors for committee participation or special assignments.





There
      are
      no arrangements pursuant to which any of our directors was compensated during
      our last completed fiscal year or the previous two fiscal years for any services
      provided as director.




28
 *Table
          of Contents*





Termination
      of Employment and Change of Control Arrangement





There
      are
      no compensatory plans or arrangements, including payments to be received from
      us, with respect to any person named in the Summary Compensation Table set
      out
      above which would in any way result in payments to any such person because
      of
      his resignation, retirement or other termination of such person’s employment
      with us or our subsidiaries, or any change in control of us, or a change in
      the
      person’s responsibilities following a change in control of us.





**Item
      11 . Security Ownership of Certain Beneficial Owners and Management**




Security
      Ownership of Certain Beneficial Owners





The
      following table sets forth the shares held by those persons who owned more
      than
      five percent of Metwood’s common stock as of September 28, 2005, based upon
      11,877,499 shares outstanding:




***Greater Than 5% Owners***





**Title
                of**
              **Class**
            **Name
                and Address**
              **of
                Beneficial Owner**
            **No.
                of**
              **Shares**
            **Percent**
              **of
                Class**Common
            Robert
                Callahan
              819
                Naff Road
              Boones
                Mill, VA 24065
            5,564,665(1)
            46.8%Common
            Ronald
                Shiflett
              819
                Naff Road
              Boones
                Mill, VA 24065
            2,151,282
            18.2%Common
            Shawn
                Callahan
              819
                Naff Road
              Boones
                Mill, VA 24065
            1,004,550
            8.5%




(1)
            Includes
                direct and indirect interests. There are 2,000,000 common shares
                included
                in this amount that are owned in the names of family members of Mr.
                Callahan.





Security
      Ownership of Management





The
      following table sets forth the shares held by Metwood directors and officers
      as
      of September 28, 2005:




***Management Ownership***





**Title
                of**
              **Class**
            **Name
                and Address**
              **of
                Beneficial Owner**
            **No.
                of**
              **Shares**
            **Percent**
              **of
                Class**Common
            Robert
                Callahan
              819
                Naff Road
              Boones
                Mill, VA 24065
            5,564,665(1)
            46.8%Common
            Ronald
                Shiflett
              819
                Naff Road
              Boones
                Mill, VA 24065
            2,151,282
            18.2%Common
            Shawn
                Callahan
              819
                Naff Road
              Boones
                Mill, VA 24065
            1,004,550
            8.5%





(1)  Includes
                direct and indirect interests. There are 2,000,000 common shares
                included
                in this amount that are owned in the names of family members of Mr.
                Callahan.





* Less
                than 1%





Ownership
                of shares by directors and officers of Metwood as a group: 73.5%





Changes
      in Control





We
      know
      of no contractual arrangements which may at a subsequent date result in a change
      our control.





29
 *Table
          of Contents*




**Item
      12 . Certain Relationships and Related Transactions**





Following
      are the transactions between Metwood and members of management, directors,
      officers, 5% shareholders, and promoters of Metwood:





We
      contract with a construction company 50% owned by our CEO which provides capital
      improvements and maintenance work on our buildings and grounds. During the
      years
      ended June 30, 2005 and 2004, the construction company billed us $-0- and
      $160,555, respectively, for its services. We also purchased two vehicles from
      the construction company for a total of $16,000 during fiscal 2004.





We
      transferred land at our book and fair market value of $89,000 to the
      construction company in partial payment of the amounts due the construction
      company. Additionally, because the construction company is owned by our CEO,
      our
      receivable from the CEO was reduced by offsetting it against our payable to
      the
      related construction company. This occurred during fiscal 2004.





On
      January 3, 2005, we entered into a sales and leaseback transaction with Cahas
      Mountain Properties, LLC (“Cahas”). Cahas is an LLC that is partially owned by
      members of the Callahan family which are also officers and directors of us.
      We
      sold our various buildings at our corporate headquarters which house our
      manufacturing plants, executive offices, and other buildings on January 3,
      2005
      for $600,000 in cash. We simultaneously entered into a commercial lease
      agreement with this entity whereby we committed to lease back these same
      properties for $6,200 per month over a ten year term. We paid $37,300 in rent
      to
      Cahas during fiscal 2005.




**Item
      13 . Exhibits and Reports on Form 8-K**





(a)
            Exhibits





See
                index to exhibits





(b)
            Reports
                on Form 8-K





Forms
      8-K filed during the year ended June 30, 2005 are incorporated by
      reference. We
      issued Form 8-K’s for 1) the change in auditors and 2) the sales and leaseback
      transaction relating to our facilities during the year ended June 30,
      2005.





**Item
      14 . Principal Accountant Fees and Services**





The
      following table sets forth the aggregate fees billed by Bongiovanni &
      Associates, CPA’s and McLeod & Company for audit services rendered in
      connection with the consolidated financial statements and reports for the years
      ended June 30, 2005 and 2004:





2005
            
            2004Audit
                fees
            
            $
            15,500
            
            $
            18,500Audit-related
                fees
            
            
            —
            
            
            —Tax
                fees
            
            
            —
            
            
            —All
                other fees
            
            
            —
            
            
            —Total
                fees
            
            $
            15,500
            
            $
            18,500





*Audit
      fees* :
       Consist of fees billed for professional services rendered for the audits
      of our consolidated financial statements and reviews of the interim consolidated
      financial statements included in quarterly reports and services that are
      normally provided by our auditors in connection with statutory and regulatory
      filings or engagements and attest services, except those not required by statute
      or regulation.





*Audit-related
      fees* :
       Consist of fees billed for assurance and related services that are
      reasonably related to the performance of the audit or review of our consolidated
      financial statements and are not reported under “Audit fees.” These services
      include accounting consultations in connection with the Sarbanes-Oxley Act
      of
      2002.





*Tax
      fees* :
       Consist of fees billed for tax compliance, tax advice and tax planning
      services.





*All
      other fees* :
       Consist of fees billed for all other services other than those reported
      above.





30
 *Table
          of Contents*




SIGNATURES





In
      accordance with Section 13 or 15(d) of the Exchange Act of 1934, the registrant
      caused this report to be signed on its behalf by the undersigned, thereunto
      duly
      authorized.





Date:
                 September 28, 2005
            */s/
                Robert M. Callahan*
              Robert
                M. Callahan
              President,
                CEO and DirectorDate:
                 September 28, 2005
            */s/
                Ronald B. Shiflett*
              Ronald
                B. Shiflett
              Vice-President
                and DirectorDate:
                 September 28, 2005
            */s/
                Shawn A. Callahan*
              Shawn
                A. Callahan
              Secretary/Treasurer
                and Director/CFO





31
 *Table
          of Contents*




**INDEX
      TO EXHIBITS**








**NUMBER**
            
            **DESCRIPTION
                OF EXHIBIT**3(i)*
            
            Articles
                of Incorporation3(ii)*
            
            By-Laws31.1
            
            Certification
                of Chief Executive Officer Pursuant to
                Securities Exchange Act Rules 13a-14 and
              15d-14
                as Adopted Pursuant to Section 302 of the
                Sarbanes-Oxley Act of 200231.2
            
            Certification
                of Chief Financial Officer Pursuant to
                Securities Exchange Act Rules 13a-14 and
              15d-14
                as Adopted Pursuant to Section 302 of the
                Sarbanes-Oxley Act of 2002





*Incorporated
      by reference on Form 8-K, filed February 16, 2000





32